Thailand's newly elected Prime Minister Samak Sundaravej on Monday unveiled an ambitious spending plan that he said would shore up the kingdom's economy despite worries over a global slowdown, AFP reported.

In his first speech to parliament, Samak also vowed to mend divisions exposed by a 2006 military coup against then-premier Thaksin Shinawatra, whose support helped propel the prime minister to victory in December elections.

Samak warned that Thailand's export-driven economy would face strains resulting from economic problems in the United States, the kingdom's biggest trading partner.

"Thailand will face severe problems in the world economy, tied to the sub-prime mortgage crisis in economically powerful countries, which has affected financial markets and damaged other countries," he said in the hour-long televised speech

"Rising oil prices will also affect inflation around the world and in Thailand," he said.

Samak said the government will dedicate itself to "creating a balanced economy immune to these troubles, by ensuring sustainable growth while improving the confidence of Thai and foreign investors."

Samak was sworn in as prime minister last month after leading the People Power Party to victory in elections by openly campaigning as Thaksin's proxy.

Thaksin has indicated he will return to Thailand from self-imposed exile in mainly London and Hong Kong to face corruption charges laid after he was ousted in the bloodless coup.

The linchpin of Samak's plan is an ambitious spending programme, originally proposed by Thaksin's government, including hefty investments in Thailand's infrastructure.

Samak called for adding nine new rail lines to Bangkok's mass transit while overhauling the national rail system. He also proposed new irrigation projects and improvements to sea ports and airports.

His policy plan included restoring many Thaksin-era rural aid schemes which had been scrapped by the military and which are often derided by Bangkok's elite as populist handouts designed to win votes.

The plan also features loan schemes for villages, debt assistance to farmers, guaranteed commodity prices, and increased protection against natural disasters.

Samak did not say how much the programmes would cost. The government has yet to begin working on a new budget.

Although Samak moved to revive and expand on Thaksin's policies, he also called for healing the gaping political rifts exposed by the coup, which was supported by the middle classes in Bangkok who believed Thaksin was corrupt.

"This government promises to administer the country with honesty and the intention of developing the country for the Thai people," Samak said.

"Our most urgent policies include national reconciliation and restoring democracy in the country, while resolving the unrest in the south," he added.

Thailand's Muslim-majority south has suffered four years of separatist unrest that has left more than 2,900 dead.

Interior Minister Chalerm Yubamrung last week announced that the government was ready to consider some form of self-rule for the region, but he was forced to backtrack after Samak branded the scheme "dangerous."

The leader of the opposition Democrat Party, Abhisit Vejjajiva, accused Samak of returning to Thaksin-era policies that had sparked divisions within the country.

"The core party in this government has shown us that they are the heirs of Thaksin's government," Abhisit told parliament.

"From now on, the government will be put to the test to prove that its policies are being implemented as promised for the public good, or for the good of themselves and their friends and families," he said.

Analysts said that while Samak had spelled out a clear economic plan, he had given no clear direction for social policies, including resolving the southern unrest.

"The government's proposal for solving the violence in the south is an abstract policy, and the government has no plan for turning that abstract policy into a concrete one," said Thammasat University professor Somjai Phagaphasvivat.